By Matthew Rothschild on August 10, 2005
Greenspan Slows Things Down
By Matthew Rothschild

August 10, 2005

Alan Greenspan seems set on slowing down this uneven economic recovery, as the Fed raised interest rates yet again on Tuesday and signaled that there are more to come.

At some point soon, these increased rates will prick the housing bubble and will make corporate borrowing so expensive that it will curb growth.

But Greenspan wants to slow growth down because he’s still trying to slay the phantom dragon of inflation.

The core rate of inflation, however, is only about 2 percent. It is not a threat to the economy. But bankers don’t like inflation, because it eats away at the money they make on their fixed loans, and Greenspan views his job as protecting the financial sector of the economy, above all.

So he’s perfectly content with unemployment at 5 percent. In fact, he doesn’t want it to dip much below that.

“Politically, they’re not going to come out and say, ‘We don’t want to see unemployment come down any more.’ But I think what they would like to see is an economy that grows just fast enough to keep unemployment stable,” explained Maury N. Harris, a top economist at UBS, in The New York Times.

And Greenspan is perfectly content with unit labor costs barely rising in the second quarter--“at an annual pace of just 1.3 percent,” as the Times article noted. That’s not even keeping pace with inflation.

But Greenspan may have been alarmed by the 0.4 percent increase in hourly wages in July, which would amount to a 4.8 percent annual wage boost.

Can’t have that!

Greenspan fears that if the economy cooks any hotter, labor markets will tighten, workers will get more leverage, they’ll finally be in a position to demand higher wages, and either companies will pass the costs on to consumers and inflation will go up, which the banks don’t like, or the companies will have to absorb the increases, which they don’t like.

Alan Greenspan and the Fed are their enforcers.

Greenspan runs the economy for Wall Street and the big corporations, not for people who are out of work, not for people who are making minimum wage, not for people who haven’t seen a decent salary boost for years.

Their health is merely incidental.

And if they get too healthy, Greenspan won’t stand for it.

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By Wendell Berry

Manifesto: The Mad Farmer Liberation Front

Love the quick profit, the annual raise,
vacation with pay. Want more 
of everything ready made. Be afraid 
to know your neighbors and to die.
And you will have a window in your head.
Not even your future will be a mystery 
any more. Your mind will be punched in a card 
and shut away in a little drawer.
When they want you to buy something 
they will call you. When they want you
to die for profit they will let you know. 
So, friends, every day do something
that won’t compute. Love the Lord. 
Love the world. Work for nothing. 
Take all that you have and be poor.
Love someone who does not deserve it. 
Denounce the government and embrace 
the flag. Hope to live in that free 
republic for which it stands. 
Give your approval to all you cannot
understand. Praise ignorance, for what man 
has not encountered he has not destroyed.
Ask the questions that have no answers. 
Invest in the millennium. Plant sequoias.
Say that your main crop is the forest
that you did not plant,
that you will not live to harvest.


Say that the leaves are harvested 
when they have rotted into the mold.
Call that profit. Prophesy such returns.
Put your faith in the two inches of humus 
that will build under the trees
every thousand years.
Listen to carrion—put your ear
close, and hear the faint chattering
of the songs that are to come. 
Expect the end of the world. Laugh. 
Laughter is immeasurable. Be joyful
though you have considered all the facts. 
So long as women do not go cheap 
for power, please women more than men.
Ask yourself: Will this satisfy 
a woman satisfied to bear a child?
Will this disturb the sleep 
of a woman near to giving birth? 
Go with your love to the fields.
Lie easy in the shade. Rest your head 
in her lap. Swear allegiance 
to what is nighest your thoughts.
As soon as the generals and the politicos 
can predict the motions of your mind, 
lose it. Leave it as a sign 
to mark the false trail, the way 
you didn’t go. Be like the fox 
who makes more tracks than necessary, 
some in the wrong direction.
Practice resurrection.

Wendell Berry is a poet, farmer, and environmentalist in Kentucky. This poem, first published in 1973, is reprinted by permission of the author and appears in his “New Collected Poems” (Counterpoint).

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